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5. Are the Jobs really getting created?
The government data only tracks job creation in the organised sector & due to this there is no clear indication as to how many jobs were created or lost. As a result, varying and contradictory job growth figures for 2018 have been publicised by most experts on Media.
Let me give you an indication as to how data is collected & analysed for these job survey. Agencies which government hugely relies on are – NSSO (National Sample Survey Office), EPFO (Employee Provident Fund Organisation) & NPS (National Pension Scheme). As per reports – NSSO collects random Job data from 1,500 households & then exponentially trend projected. EPFO (- relies on how many PF accounts which are active year on year, so any drop in number of old accounts getting inactive is considered as a lead indication to predict loss of jobs. NPS – relies on new subscribers being added year on year & old subscribers accounts getting inactive year on year.
Well, the EPFO numbers are a good indication for the private sector, given that, establishments employing more than 20 employees are required to contribute with employees to their EPF accounts. It means the EPFO data probably is the best we can do. However, flipside to it is – that millions of employees are in smaller organisations that won’t come under the EPFO. And NPS is voluntary in the private sector and an increase in numbers may indicate greater awareness of NPS. Remember in a job market like India, Organised Job sector accounts to only 15% – so the rest 85% falls under informal jobs sector and hence cannot be tracked. So just as any other statistics – it becomes very important to understand the data used for these surveys & then interpret analysis of these surveys.
Few prominent reasons why there is huge drop of jobs in informal sector – a> Growing literacy, people are not comfortable taking low wage jobs. b> Construction jobs have slowed down, due to use of pre-fabricated materials & less reliance on manual labour. c> Home renovations have slowed down i.e. ‘kacha’ to ‘pakka’ houses have slowed its pace. d> Use of technology in agriculture have also lead to a slowdown to a certain extent. Construction & Agriculture are massive job creators in our economy, so a slow down will certainly have crippling effect in the informal job sector.
As discussed in my earlier notes on De-Monetisation, existence of parallel economy has a great capacity to create jobs. Measures like – De-Monetisation killed jobs to a great extent initially, but digitisation of currency as a medium has also created a lot of jobs in the organised sector. Say for Example – Paytm. Paytm is one of prominent companies that has been a key beneficiary of De-Mon followed by its other contemporary Digital payment gateway followers. E-Commerce trends & Courier & logistics sectors have certainly emerged victorious post De-Mon & as a resultant has created several jobs both in the organised & unorganised sector.
Speed of startup culture which are bucking the trends, stands a real chance to benefit from tax holidays & other initiatives extended by the government. Indeed driven by policies, there has been a paradigm shift in terms of stronger believers in Startup trends which are fuelled by young & efficient risk takers. So even a decent projection of this trend, will translate to creation of several job opportunities for the generations to come. It’s good to see young population evolving from the ‘risk takers’ tag to being an ‘efficient job creators’ tag.
– Article by Suman Adithya Rao (SEBI Certified Research Analyst, Management Graduate in Entrepreneurship & Small Business Management)
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